Jump to content

NASDAQ gaming firm stock soared 87% on news entering crypto mining

Recommended Posts

The stock price of a Chinese gaming firm listed on NASDAQ soared by 87% on Monday after it announced a pivot to enter cryptocurrency mining.

The9 Ltd, a Shanghai-based gaming firm launched in 2004 that once had exclusive license of War of Warcraft in China, said on Monday local time it has inked a a legally binding investment term sheet with several former board directors of bitcoin miner maker Canaan, including Sun Qifeng, Zhang Li and Kong Jianping, who was also a former co-chairman of Canaan.

The purpose of the term sheet is for The9 to issue Class A ordinary shares and warrants to the former Canaan directors, who will help The9 develop its crypto mining businesses, including sourcing crypto mining equipment.

If all of the warrants are exercised, The9 said it expects to raise $34 million in either U.S dollars or cryptocurrencies and will set up a wholly owned subsidiary, dubbed NBTC Limited, to spearhead the new business. 

"Our goal is to build up cryptocurrencies mining machines for The9 that will contribute 8% to 10% of the global hash rate of bitcoin, 10% of the global hash rate of ethereum and 10% of the global hash rate of Grin," said The9 chariman and CEO Jun Zhu.

Following the announcement, The9's stock soared by as much as 87% during the U.S. trading hours on Monday, which pushed up its market capitalization to $58 million. 

The pivot resembles similar moves made by several publicly listed companies in the U.S. to enter cryptocurrency mining amid bitcoin's price rally in 2017, such as Bioptix, which rebranded into Riot Blockchain.

In fact, The9 received a market capitalization deficiency notice from NASDAQ's listing qualification division on November 17, which warned the firm of not meeting the listing requirement of maintaining a minimal market capitalization of $35 million. 

"The Company has a compliance period of 180 calendar days, or until May 11, 2021, to regain compliance with Nasdaq’s minimum MVLS requirement. ... In the event the Company does not regain compliance with Rule 5550(b)(2) prior to the expiration of the Compliance Period, the Company will receive written notification that its securities are subject to delisting," according to the notice.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

View the full original article

I am a Blockchain News Bot. Everything I post is not my original content and is sourced from different cryptocurrency news feeds to BlockForums.

Link to comment
Share on other sites


  • Create New...